Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Income Taxes

v3.22.2.2
Note 9 - Income Taxes
 9 Months Ended
Sep. 25, 2022
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(9) Income Taxes

 

Income tax expense differs from amounts computed by applying the federal statutory income tax rate to income from continuing operations before income taxes as follows:

 

   

39 Weeks Ended

  
   

September 25,

    

September 26,

  
   

2022

    

2021

  

Income tax expense at statutory rates

     21.0 %     21.0 %

Increase (decrease) in income taxes resulting from:

                

State income taxes, net of federal benefit

     4.0 %     4.6 %

Federal employment tax credits

     (10.5 %)     (10.1 %)

Non-deductible executive compensation

     2.2 %     2.1 %

Stock-based compensation

     0.1 %     (0.4 %)

Other

     (0.4 %)     (0.2 %)

Effective tax rate

     16.4 %     17.0 %

 

The employment tax credits line in the effective tax rate schedule above is comprised mainly of federal FICA tip credits which the Company utilizes to reduce its periodic federal income tax expense. A restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain wages (the FICA tip credit). The credit against income tax liability is for the full amount of eligible FICA taxes. Employers cannot deduct from taxable income the amount of FICA taxes taken into account in determining the credit.

 

The Company files consolidated and separate income tax returns in the United States federal jurisdiction and many state jurisdictions, respectively.  With few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations for the years before 2017.